Public and investors may visit the Company’s website at www.firstmedia.com to gain information the Company’s business, or may contact the Corporate Secretary by email:
corporate.secretary@firstmedia.com for further information of the Company.
INTERNAL AuDIT uNIT
The establishment of Internal Audit Unit was based on Bapepam-LK regulation No. IX.I.7, Decree of Bapepam-LK Chairman No. Kep-496/BL/2008 regarding the establishment and guidelines of Internal Audit Unit Charter. Internal Audit Unit has the responsibility to evaluate the implementation of internal control and risk management in accordance with First Media policy, and to evaluate the efficiency and effectiveness in finance, accounting, operational, human resources, marketing, information technology and other activities. In performing its responsibility, the Internal Audit Unit will always cooperate with the Audit Committee and shall be responsible directly to the President Director. The establishment of Internal Audit Unit is the manifestation of Company’s commitment to create a good and efficient corporate governance.
On 2012, The Internal Audit Unit was handled by Leony Hartono. Started her career in 2000 as an auditor with public accounting firm in Detroit, USA. Joined Public Accountant Ernst & Young Indonesia in 2002 and later worked in the banking and manufacturing industry, before joining First Media in 2008. Received both her Bachelor of Accounting and Master in Professional Accounting from Michigan State University, United States of America.
INDEPENDENT AuDIToR
To comply with the Regulation of Minister of Finance of Republic Indonesia number 17/
PMK.01/2008 regarding Public Accountant Service and Bapepam-LK Rule Number VIII.A.2 regarding Independence of Accountant Who Is Giving Audit Services In Capital Market, for financial year 2012 the consolidated financial report of the Company is audited by public accountant Aryanto Amir Jusuf Mawar & Saptoto, with Grace Octavia as the auditor.
LITIgATIoN
1. ARBITRATIoN
On September 3, 2008, PT Ayunda Prima Mitra (APM) (formerly was a subsidiary of the Company), had filed a lawsuit to the District Court of South Jakarta against Astro All Asia Networks PLC (Defendant I), Measat Broadcast Network System SDN BHD (Defendant II), All Asia Multimedia Networks FZ-LLC (Defendant III), Measat Satellite Systems SDN BHD (Defendant IV), Ralph Marshall (Defendant V), Sean Dent (Defendant VI), Nelia Concap Cion Molato (Defendant VII), Liza Tjondro (Defendant VIII), PT Adi Karya Visi (Defendant IX), Tara Agus Sosrowardoyo (Defendant X), PT Karyamegah Adijaya (Defendant XI), PT Abadi Berkah (Defendant XII) and PT Direct Vision (DV) (Co-Defendant) with Register Number, No:1100/Pdt.G/2008/PN.JKT-SEL dated September 3, 2008. The Company is not a party in this lawsuit. APM filed the said lawsuit to claim for a total amount of USD 1,500,000,000 (“Indonesian Proceedings”).
An interim decision was ordered on May 13, 2009, with respect to the Indonesian Proceedings which rejected the challenges submitted by the Defendants I, II, III and V and held that the said court is competent and has the jurisdictional powers to hear the matter (”Interim Decision”). Over such Interim Decision, the relevant defendant has made an appeal to Jakarta District Court on May 22, 2009, Defendant I, II, III and V. Further on September 17, 2009, the District Court of South Jakarta has issued the decision with respect to the Indonesian Proceedings in the principle case. APM made an appeal against the said principle case decision at the Jakarta High Court on September 28, 2009. The status of the Indonesian Proceedings is still in the examination process at the appeal level at the Jakarta High Court.
On October 6, 2008, (i) Astro Nusantara International B.V., (ii) Astro Nusantara Holdings B.V., (iii) Astro Multimedia Corporation N.V., (iv) Astro Multimedia N.V., (v) Astro Overseas Limited (formerly known as AAAN (Bermuda) Limited), (vi) Astro All Asia Networks PLC, (vii) Measat Broadcast Network Systems SDN BHD and (viii) All Asia Multimedia Networks FZ-LLC (“Astro Group”) filed a Notice of Arbitration against APM, the Company and PT Direct Vision (“DV”) under the rules of Singapore International Arbitration Centre (“SIAC”) in Singapore. The Notice of Arbitration, dated October 6, 2008 filed by Astro Group claimed payment of the sum of approximately USD 245,000,000 by way of restitution and/or quantum merit by APM, the Company and DV pursuant to the Subscription and Shareholders Agreement dated March 11, 2005 (“SSA”), as well as damages for breach of Clause 17.6 of the SSA arising out of the Indonesian Proceedings.
On May 7, 2009, SIAC issued an Award on Preliminary Issues of Jurisdiction, Interim Anti-Suit Injunction and Joinder ARB No.062 of 2008 (“Interim Arbitration Award”). Astro Group has applied for the enforcement of the Interim Arbitration Award to the Chairperson of the District Court of Central Jakarta. On the said application, APM and DV submitted cancellation request to the District Court of Central Jakarta to decline the enforcement of Interim Arbitration Award. In the request, APM and DV stated: (i) that the disputes under the arbitration proceeding were only commenced at the SIAC by Astro Group on the October 6, 2008, which is after APM has filed the Indonesian Proceedings against the Defendant at District Court of South Jakarta on September 3, 2008; (ii) that the disputes in the arbitration proceeding are not commercial disputes as stipulated in paragraph b of Article 66 the Arbitration Law No.30 year 1999; (iii) that the Interim Arbitration Award intervenes the rules of the Civil Procedure Regulation in Indonesia, and such Interim
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Arbitral Award cannot be enforced by the District Court of Central Jakarta.
On October 28, 2009, the Chairperson of the District Court of Central Jakarta held that the Interim Arbitration Award is beyond the authority and has intervened the Indonesian Proceedings, and ordered that the Interim Arbitration Award is non executable (Non Executorial), i.e. cannot be executed in Indonesia. The Non Executorial stipulation was later affirmed by the Supreme Court on February 24, 2010 with registration No.01 K/Pdt.
Sus/2010 and APM has received a copy of the certified decision of the Supreme Court in October 2010.
On February 16, 2010, SIAC issued the Interim Final Award ARB No. 062 of 2008 (registered at SIAC Registry of Award as Award No.7 of 2010 on February 18, 2010) (“Interim Final Award”) and ordered that APM, the Company and DV are jointly and severally liable in restitution, for the following amounts:
a) to Astro All Asia Network PLC, the sum of RM 103,334,546;
b) to Measat Broadcast Network Systems SDN BHD, the sum of USD 5,773,134; and c) to All Asia Multimedia Networks FZ-LLC, the sum of USD 59,327,055
Further, in relation to the claims arising out of the Indonesian Proceedings, the Tribunal ordered that APM and the Company shall pay damages to Astro Nusantara International BV and Astro Nusantara Holdings BV in the amounts of USD 608,276.54, GBP 22,500 and SGD 65,000.
The Interim Final Award has been amended as stipulated in the Memorandum of Correction Pursuant to Rule 28.1 of The SIAC Rules 2007 dated March 23, 2010 (registered at SIAC Registry of Award as Award No.14 of 2010 on April 12, 2010) in which, inter alia, the amount of restitution awarded to All Asia Multimedia Networks FZ-LLC has been amended from USD 59,327,055 to USD 59,459,258 (“Amendment of Interim Final Award”).
On February 5, 2010, SIAC issued a Further Partial Award and SIAC Award on Cost for the Preliminary Hearing from April 20 to 24, 2009 (registered at SIAC Registry Award as Award No.06 of 2010 dated 10 February 2010) in which APM, the Company and DV were ordered to pay the Cost for the Preliminary Hearing from April 20 to 24, 2009 in the amount of (if converted to the USD) approximately USD 600,000 (“Partial Costs Award”).
On August 3, 2010, the arbitral tribunal of SIAC further issued a Final Award on Interests and Costs (registered at SIAC Registry Award as Award No. 41 of 2010 dated August 5,2010) (“Final Costs Award”) whereby APM, the Company and DV were held jointly and severally to:
a) pay interest to Astro All Asia Network PLC in the amount of RM 35,947,386;
b) pay interest to Measat Broadcast Network Systems SDN BHD in the amount of USD 1,397,493; and
c) pay interest to All Asia Multimedia Networks FZ-LLC in the amount of USD 14,531,934.
The Final Cost Award apportioned the costs of arbitration and held APM, the Company and DV jointly and severally liable and paid to the SIAC the deposit in the amount of SGD 617,217.48 and the amount of SGD 151,708 in regard with the hearing in London in September 2009. The legal costs and disbursements in which APM, the Company and
DV were jointly and severally liable are in the amount of GBP 730,024, SGD 2,881,245, RM 63,328 and USD 35,547.
The Company’s legal advisor, MR & Partners Law Firm, stated that the Company’s obligation to pay under the Interim Final Award, the Partial Costs Award and the Final Costs Award are subject to enforcement in accordance with the relevant applicable laws and regulations in Indonesia within the jurisdiction of the Indonesian courts, as stipulated under the Article V of the New York Convention and paragraph c of Article 66, Article 70 and paragraph 18 General Explanation of Arbitration Law No. 30 year 1999. Since the object of the SSA, all the Company’s assets and the execution are governed by the laws of Indonesia, the enforcement of the Interim Final Award, the Partial Costs Award and the Final Costs Award shall comply with the laws and regulations of Indonesia.
The Arbitration Law stipulates that for the recognition and enforcement of an International Arbitral Award in Indonesia, it shall fulfil the provisions of the Arbitration Law, and the parties can request to have an arbitral award annulled upon the existence of certain conditions as set out in the Articles and Explanation of the Arbitration Law.
On June 23, 2010, APM and DV had filed the annulment claim toward the Arbitration Final Award, Partial Costs Award and The Correction of The Interim Final Award to the District Court of Central Jakarta with Case Register Number: 300/PDT.G/2010/PN.Jkt.
Pst (“Case No.300”), provided that such Arbitration Awards have contravened with public policy, therefore those such Arbitration Awards shall not be enforced in Indonesia.
The Defendant party in the Case No. 300 is Astro Group.
Toward the Case No.300, the Council of Judges has issued a court injunction, which mainly rules that the District Court of Central Jakarta is not authorized to examine the claim toward the Arbitration Final Award Partial Costs Award and The Correction of The Interim Final Award, where it had been appealed to the Supreme Court of Republic of Indonesia on 19 May 2011, as stated under the Minute of Appeal Application Number 113/SRT.PDT.BDG/2011/ PN.JKT.PST in conjunction with Number 300/PDT.G/2010/
PN.JKT.PST. Up until this moment, the Supreme Court has not issued any official decision regarding to such appeal.
Other than the Case No. 300, DV has also filed a claim toward Astro Group regarding
“The Refusal to Issue The Executorial Toward The Final Arbitration Award” in Central Jakarta District Court with Case Register Number: 301/PDT.G/2010/PN.Jkt.Pst (“Case No. 301”), on 23 June 2010.
On 25 August 2011, the Central Jakarta District Court has issued the Decision on Case No. 301, which mainly ruled that the DV Claim could not be accepted.
In one of the legal considerations given by the panel of judges in its decision has stated that the DV claim could not be accepted because it was considered premature (imperfect time of submission) by the revocation of Letter of Application for Executorial Injunction of Final Arbitration Award Related to the SIAC Arbitration Case No. 062/08 dated 9 June 2010 by Astro Group (Further Partial Award dated October 3, 2009, Partial Costs Award, Interim Final Award, Amendment of Interim Final Award) through their revocation letter dated 26 August 2010.
On 9 September 2011, through the letter No. Ref.:1000/SWH-0907/L/IX/PMH-AMP-LS,
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DV has submitted the memory of appeal toward Central Jakarta District Court Decision dated 26 August 2011, as stated in the Letter of Appeal Application No.67/Srt.Pdt.
Kas/2011/PN.JKT.PST. in conjunction with Number: 301/PDT.G/2010/PN.JKT.PST.
Currently, there is no formal written decision issued by the Supreme Court and already formally notified by Central Jakarta District Court to DV (and/or its lawyer), which stated that the Supreme Court has already rejected DV’s appeal against Central Jakarta District Court Decision on case No. 301/PDT.G/2010/PN.JKT.PST
It is necessary to be noted that up until today, there are no order for the executorial (order to enforce an award) toward Further Partial Award dated October 3, 2009, Partial Costs Award, Interim Final Award, Amendment of Interim Final Award, that has been issued by the Head of District Court of Central Jakarta in Indonesia, as such order for executorial requirements is stipulated by Article 66 (d) of Arbitration Law.
Whereas on 11 September 2012, the Central Jakarta District Court has rendered an Order on International Arbitration Award based on No. 32 year 2009 jo No. 16 year 2010 jo No. 07 year 2010 jo No. 14 year 2010 jo No. 41 year 2010 states that SIAC Award dated 3 October 2009 (Further Partial Award), Partial Cost Award, Interim Final Award, Amendment of Interim Final Award,and Final Cost Award (all referred to as SIAC Awards) cannot be executed (Non Exequator) in Indonesia.
Based on legal consideration given by the Central Jakarta District Court, the said SIAC Awards cannot be enforced or executed because such SIAC Awards were in the form of intervention by the foreign jurisdiction (international arbitration) to the judicial jurisdiction in Indonesia, which obviously forbid by prevailing laws and regulations in Indonesia (vide Article 3 paragraph (2) Law No. 48 of 2009 concerning on Judicial Power violating the procedural law principles in Indonesia (principle of “Poin’t de Interest Poin’t de action”), and violating the principle of “Audi et Alteram Partem”, therefore the said SIAC Awards can be considered against the public order.
The management is of the opinion that based on the Company’s legal advisor’s advice, the Interim Final Award, the Partial Costs Award and the Final Costs Award are a continuance of the Interim Arbitral Award. The Company’s legal advisor, MR & Partners Law Firm has concluded that the Interim Final Award, the Partial Costs Award and the Final Costs Award could not be enforced in Indonesia, and moreover, the Company is not legally liable for the execution of the Interim Final Award, the Partial Costs Award and the Final Costs Award under the applicable laws of Indonesia.
The Company’s legal advisor, MR & Partners Law Firm, stated that based on Article V New York Convention, the Company was entitled to refuse the recognition and enforcement of the said SIAC Awards in Indonesia with the legal reasoning pursuant to Article V paragraph (2) b New York Convention which stated that the recognition and enforcement of the Arbitration Award can not be contrary to the Indonesian Public Policy.
The said application shall be filled in District Court of Central Jakarta.
On March 24, 2011, the Astro Group applied to enter the SIAC Awards in Singapore as Judgments of the High Court of Singapore, in order for the SIAC Awards to be executed in Singapore. The High Court of Singapore issued an order for the executorial of SIAC Awards which consist of Interim Final Award, SIAC Award on Further Partial Award dated
October 3, 2009, Interim Final Award, Amendment of Interim Final Award, and Final Cost Award (“Judgment”).
On May 3, 2011, the Company’s lawyers in Singapore applied to set aside the Judgments obtained by the Astro Group. The Company’s applications were successful; the Singapore High Court set aside the Judgments and at the same time, allowed the Company to file its applications to challenge the enforcement of the SIAC Awards in Singapore. The Company filed the further applications on 12 September 2011. The Astro Group has also appealed against the setting aside of the Judgments. Both the Astro Group’s appeals and the Company’s applications to challenge enforcement of the SIAC Awards were heard in the Singapore High Court on 23, 24 & 25 July 2012, and the High Court has reserved judgment on both the appeals and applications.
On 23 October 2012, the Singapore High Court released its decision (i) dismissing the Astro Group’s Appeals and (ii) dismissing the Company’s Singapore Applications. The Company has until 22 November 2012 to file an appeal to the Court of Appeal and the appeal will be heard in April 2013. The Company and the Astro Group will be represented by their respective Queen’s Counsel.
On July 8, 2011, the High Court of Singapore issued an Injunction Prohibiting Disposal of Assets Worldwide Order (“Injunction”), limiting the Company’s dealings with assets up to the amount stated in the Injunction. One important exception to the Injunction is that the Company is not prohibited from dealing with or disposing with any of its assets in its ordinary and proper course of business.
In July 2012, the Astro Group applied to vary the Injunction, in relation to an Option between the Company and Asia Link Dewa Ltd (the “Option”). On 1 August 2012, the High Court of Singapore made an interim order, without prejudice to the Company’s rights to contest the application, for the payment of any monies from the exercise of the Option into the Company’s bank account in Singapore, if the Option is indeed exercised.
The substantive hearing of the Astro Group’s application to vary the Injunction has been adjourned.
The Company has been advised by its lawyers and will continue to take all necessary steps to minimize the effect of the Injunctions on the continuity of the Company’s business operations and activities.
On August 3, 2010, September 9, 2010 and December 9, 2010, upon the Astro group’s applications for the executorial of SIAC Awards in Hong Kong, the High Court of Hong Kong has issued orders for the execution of SIAC Awards which consist of Interim Final Award, SIAC Award on Further Partial Award dated October 3, 2009, Amendment of Interim Final Award, and Final Cost Award (the “HK Orders”). Judgment was subsequently entered in terms of the HK Orders on 9 December 2010 (“HK Judgment”). The Company has appointed Solicitor in Hong Kong in order to file an application to set aside the said order.
On July, 25, 2011, the Company’s Shareholders, i.e. Across Asia Limited (AAL), holder of 55.11% of shares in the Company, domiciled at Hong Kong, has received the Garnishee Order To Show Cause from the High Court of Hong Kong. As stated in the
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AAL’s Information Disclosure dated July 26, 2011 in Hong Kong Stock Exchange, the Garnishee Order To Show Cause ordered that all AAL’s existing debts or in due date shall not be paid to the Company (”Debts”). Furthermore, based on the Garnishee Order To Show Cause, on August 17, 2011, AAL was scheduled to attend before the court in the application hearing by Astro Group. In the said hearing, Astro Group requested that AAL shall pay the Debts, or part of the Debts to Astro Group up to the amount of the Company’s Debts to Astro Group, including all cost related with the Garnishee Order To Show Cause.
Based on Hong Kong Court Decision made by Deputy High Court Judge Lok dated March 21, 2012, it orders that ALL needs to pay the Loan into the Court pending the resolution of the Hong Kong proceedings (“Payment Into Court Order”).
AAL has lodged an appeal to the Court of Appeal against the Payment Into Court Order and the appeal hearing took place on 3 August 2012. Such appeal was unsuccessful, and therefore on 7 September 2012, AAL took out a further application for leave to appeal to the Court of Final Appeal. The leave application was heard on 31 October 2012.
Due to the BANI Award (as mentioned in paragraph (2)(d) below), on 24 September 2012, AAL made an application to the Court for an order to discharge the Payment Into Court Order and also another application for an order to lift the stay of the Garnishee Proceedings and to discharge the Garnishee Order To Show Cause. The said applications were heard on 27 September 2012, during which Deputy High Court Judge Lok ordered that the stay in respect of the Garnishee Proceedings be lifted (to expedite the hearing).
At this hearing, the Astro Group requested the Court to fix a timetable for AAL to comply
At this hearing, the Astro Group requested the Court to fix a timetable for AAL to comply